Tokmanni Group Oyj · OMXHEX:TOKMAN
Tokmanni Group Oyj — H1 2019 Earnings Presentation
23 slides from Tokmanni Group Oyj's earnings presentation, Aug 8, 2019
Slide 1: Half-year Financial Report 2019
Half-year Financial Report 2019 Strong second quarter, with clear improvement in revenue and EBIT Mika Rautiainen, CEO Markku Pirskanen, CFO 8 August 2019
Slide 2: Strategy implementation is progressing
Strategy implementation is progressing • Tokmanni continues to strengthen its position as the leading general discount retailer in Finland • Key competitive advantages are – low prices – interesting and extensive product selection – good customer experience • Focus on improving profitability and the
Slide 3: Highlights Q2/2019
Highlights Q2/2019 • The spring season was successful, and sales were high • During the spring season, Tokmanni succeeded in reducing its dependency on the weather through more extensive product category sales • Profitability started to improve • New stores were opened and existing stores were expan
Slide 4: Q2/2019: strong development
Q2/2019: strong development • Revenue grew by 10.2% (11.0%) and was EUR 239.9 million (217.7) • Like-for-like revenues grew by 5.3% (7.7%) • Comparable gross profit totalled EUR 84.5 million (76.1), gross margin 35.2% (34.9%) • Comparable EBITDA totalled EUR 34.0 million (27.4), 14.2% of revenue (12
Slide 5: 1–6/2019: EBIT improved clearly
1–6/2019: EBIT improved clearly • Revenue grew by 9.4% (11.0%) and was EUR 428.0 million (391.3) • Comparable like-for-like grew by 4.8% (7.0%) • Comparable gross profit totalled EUR 143.1 million (130.6), gross margin 33.4% (33.4%) • Comparable EBITDA totalled EUR 46.8 million (39.5), 10.9% of reve
Slide 6: Actions to implement strategy and improve profitability continued
Actions to implement strategy and improve profitability continued • Improving gross margin – Increasing sales of private labels and direct imports – Reducing the waste of food and flowers in particular • Reducing the share of operating expenses – Development in the right direction in the case of the
Slide 7: Tokmanni’s store network grew as planned
Tokmanni’s store network grew as planned Tokmanni has 189 stores (30 June 2018: 177) New stores • Q1/2019 – Keminmaa (Centtilä), Sodankylä (Säästökuoppa), Rovaniemi (TEX) and Kemijärvi (TEX) • Q2/2019 – Tampere Tesoma and Loppi • Autumn 2019 – Virrat and Vääksy • Several stores were renovated and ex
Slide 8: Online sales grew strongly and profitability improved
Online sales grew strongly and profitability improved • Tokmanni’s online sales accounted for 0.6% (0.4%) of its total revenue in 1–6/2019 and it grew by 65,6% • The further development of the online store is progressing – Aiming for the acquisition of new customers – The Click & Collect service is
Slide 9: Tokmanni’s and non-grocery market development, %
Tokmanni’s and non-grocery market development, % Sales development, % 12,0 10,2 11,0 11,0 8,0 7,8 8,0 8,3 4,0 4,5 4,4 4,0 0,0 1,9 1,4 1,6 1,1 0,6 -1,2 -4,0 -1,9 -2,9 -8,0 -7,4 -9,0 -12,0 -11,0 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Tokmanni Non-grocery market 9 8.8.2019 Half Yea
Slide 10: Financial review
TOKMANNI Financial review
Slide 11: Tokmanni’s like-for-like customer visit development
Tokmanni’s like-for-like customer visit development 3,0 % 3,0 % 0,2 % -0,1 % -1,0 % -1,4 % 2014 2015 2016 2017 2018 1-6/2019 11 8.8.2019 Half Year Financial Report 2019
Slide 12: Tokmanni’s revenue is growing
Tokmanni’s revenue is growing Revenue development Like-for-like revenue development 9.3% 9.4% 5.6% 4.8% 3.0% 2.9% 2.7% 2.7% -0.3% -0.1% -0,6% -1,3% 2014 2015 2016 2017 2018 1-6/2019 12 8.8.2019 Half Year Financial Report 2019
Slide 13: Tokmanni’s operations are subject to seasonality
Tokmanni’s operations are subject to seasonality Comparable Revenue, EBIT, M€ M€ 30,0 300,0 25,3 25,0 250,0 20,0 18,7 15,5 200,0 15,0 13,1 150,0 10,0 268,4 239,9 217,7 210,7 100,0 5,0 173,7 188,1 0,0 - 1,9 - 2,2 50,0 - 5,0 0,0 Q1/2018 Q2/2018 Q3/2018 Q4/2018 Q1/2019 Q2/2019 Revenue Comparable EBIT 1
Slide 14: Q2/2019: revenue grew by 10.2%
Q2/2019: revenue grew by 10.2% 428,0 391,3 • The strong revenue growth was mainly driven by focusing on – low prices – product selections expansion – store network expansion and development 239,9 217,7 – brand awareness • Demand was strong for yard, balcony and garden products and home textiles in p
Slide 15: Q2/2019: comparable gross profit, right direction
Q2/2019: comparable gross profit, right direction 143,1 • Gross profit development was primarily 130,6 affected by the sales mix and loss reduction 84,5 • The share of campaign products of 76,1 revenue remained at the previous year’s level 35,2 % 34,9 % 33,4 % 33,4 % • Gross margin development is al
Slide 16: Development of private labels and direct imports
Development of private labels and direct imports Private label's share of sales, % Direct import’s share of sales, % Private label Other Import through Shanghai Other direct import 30,4 (31,3) 9,3 10,3 8,3 9,0 9,6 69,6 (68,7) 13,6 14,1 14,9 14,4 12,5 1–6/2019 (1–6/2018) 2016 2017 2018 1-6/2018 1-6/2
Slide 17: Operating expense ratio improved
Operating epense ratio improved • The EUR-denominated increase in 98,3 operating expenses was mainly due to 92,9 – the increase in the number of stores and therefore operating expenses increased 49,6 51,5 • Personnel expenses totalled EUR 57.6 million (53.5), 13.5% of revenue (13.7%) in 1-6/2019 22,
Slide 18: Balance sheet and financial position
Balance sheet and financial position • The increase in inventories was primarily due to growth 189 in the store network and partly to the wider selection of 177 SKUs • Due to the increase in inventories, cash flow from operating activities decreased in January–June and was EUR 9.5 million (17.4) • I
Slide 19: Net capital expenditure
Net capital expenditure • Capital expenditure was mainly focused on 8,2 7,6 – the expansion of the store network – renovations of stores 6,2 – development of digital services 5,5 • Capital expenditure in 2019 is expected to be around EUR 14–15 million Q2/2018 Q2/2019 1-6/2018 1-6/2019 19 8.8.2019 Ha
Slide 20: Outlook for 2019 unchanged
Outlook for 2019 unchanged • Tokmanni expects good revenue growth for 2019, based on the revenue from the new stores acquired and opened in 2018 and new stores to be opened in 2019, as well as on slight growth in like-for-like revenue. • Group profitability (comparable EBIT margin) is expected to im
Slide 21: Tokmanni’s new private label for skin care and washing
Tokmanni’s new private label for skin care and washing 21 8.8.2019 Half Year Financial Report 2019
Slide 22: Business Review 1–9/2019 will be published on October 9
Business Review 1–9/2019 will be published on 30 October 2019 IR contact: Maarit Mikkonen maarit.mikkonen@tokmanni.fi +358 40 562 2282 ir@tokmanni.fi
Slide 23: Thank you!
Thank you! ir@tokmanni.fi www.tokmanni.fi